Hillsborough Street district could expand – but not with councilman’s property

The special tax district that funds efforts to revitalize Hillsborough Street is looking to expand its boundaries, but one city councilman doesn’t want his own property included and taxed.

Elizabeth Wilson picks up trash on Hillsborough Street in 2012. As a full-time ambassador employed by the Hillsborough Street Community Services Corp., Wilson tries to keep the street clean.
tiwabu@newsobserver.com

The special tax district that funds efforts to revitalize Hillsborough Street is looking to expand its boundaries and services, but one city councilman doesn’t want his own property included and taxed.

Last week, the Hillsborough Street Community Services Corp. voted to extend the district down several side streets, including Oberlin Road, where City Councilman Russ Stephenson lives. The board agreed to leave Stephenson’s property out of the tax district, where owners pay an additional 10 cents per $100 valuation.

While the district’s boundaries exclude single-family homes – the services are targeting to help businesses – Stephenson’s property is surrounded by commercial lots on Oberlin.

Similar to the Downtown Raleigh Alliance, the Hillsborough Street group uses the tax revenue to recruit new businesses, host events that draw visitors to the area, and maintain the street through its “Clean and Safe” program.

The group’s leaders want to add more services, ranging from a bigger security presence to landscaping to more festivals and special events. To pay for that, they’re proposing to increase the district’s tax rate to 15 cents per $100 valuation.

The plan will go before the Raleigh City Council in June for a public hearing and a vote. The council will be asked to renew the organization’s charter and add areas where more business and development is happening or is expected. That includes the southernmost stretch of St. Mary’s Street, Oberlin Road toward Cameron Village, and parts of Ashe Avenue and Hope Street. The expansion to the east will eliminate a gap in services between the Hillsborough Street district and the areas served by the Downtown Raleigh Alliance.

“It’s a natural time to revisit our boundaries and the services that we provide,” director Jeff Murison said, adding that his organization’s work has contributed to the area’s revitalization.

“The property values have increased, foot traffic has increased, food and beverage sales is continuing to grow. There’s a healthy amount of reinvestment by the public sector and the private sector.”

But several board members took issue with leaving Stephenson’s property out of the expanded district, which will save the councilman about $380 on his annual tax bill.

“He will directly benefit from the (business improvement district’s) services due to the fact that the BID will be providing services on either side of his property,” board chairman and restaurant owner Kevin Jennings wrote in an email. “It seems unethical to accept BID services while not paying for them. The adjoining property owners will pay for his property to be serviced.”

But Councilman Thomas Crowder, who also serves on the Hillsborough Street board, said Stephenson shouldn’t be included because he lives in the house.

“Since he does not have a retail or other business operation like the other residents on the street, he will not financially benefit from other services the BID has to offer, i.e. special events, promotions, etc.,” Crowder wrote to the board. “Business Improvement Districts benefit commercial operations within their boundaries, for which the taxes are collected.”

For his part, Stephenson says similar exemptions were granted when the district was first established in 2008. “My concern is that I just be treated the same as everyone else has in the BID: They’ve not incorporated owner-occupied residences,” he said.

Stephenson’s 1.2-acre property has become an anomaly in a fast-growing area as he seeks to protect historic buildings amid development pressures. Last year, he met with neighbors to propose rezoning his home from office and institutional use, though he hasn’t yet filed a formal application to make the change.